Woodruff v. Trapnall 51 U.S. 190 (1850)

U.S. Supreme Court

Woodruff v. Trapnall, 51 U.S. 10 How. 190 190 (1850)

In 1836, the Legislature of Arkansas chartered a bank the whole of the capital of which belonged to the state and the president and directors of which were appointed by the general assembly.

The twenty-eighth section provided "that the bills and notes of said institution shall be received in all payments of debts due to the State of Arkansas."

In January, 1845, this twenty-eighth section was repealed.

The notes of the bank which were in circulation at the time of this repeal were not affected by it.

The undertaking of the state to receive the notes of the bank constituted a contract between the state and the holders of these notes, which the state was not at liberty to break, although notes issued by the bank after the repeal were not within the contract, and might be refused by the state.

Therefore a tender, made in 1847, of notes issued by the bank prior to the repealing law of 1845 was good to satisfy a judgment obtained against the debtor by the state, and it makes no difference whether or not the debtor had the notes in his possession at the time when the repealing act was passed.

On 2 November, 1836, the State of Arkansas passed an act to incorporate the Bank of the State of Arkansas. The capital was one million of dollars, which was raised by a sale of the bonds of the state, or by loans founded upon those bonds. The president and directors were appointed by a joint vote of the general assembly. All dividends upon the capital stock were declared to belong to the state, subject to the control and disposal of the legislature.

The twenty-eighth section was as follows, viz.: "That the bills and notes of said institution shall be received in all payments of debts due to the State of Arkansas." The other

sections of the act were in the usual form of conferring general banking powers.

In 1836, William E. Woodruff was elected by the General Assembly of Arkansas Treasurer of the state, and on 27 October, 1836, executed a bond to James S. Conway, governor of the state, in the penal sum of three hundred thousand dollars conditioned for the faithful performance of his duties as treasurer. There were seven sureties, whose names it is not necessary to mention. The time for which Woodruff was to serve was two years, "and until his successor shall be elected and qualified." His term of office was thus from 27 October, 1836, to 25 December, 1838.

On 23 March, 1840, the State of Arkansas brought a suit upon this official bond against the principal and sureties in the Pulaski Circuit Court. The breach alleged was that Woodruff had not paid over to his successor the sum of $2,395.18. It is not necessary to trace the history of this suit; suffice it to say that it eventuated in a judgment against Woodruff for $3,359.22 and costs.

On 10 January, 1845, the legislature passed an act relating to the revenue of the state, the nineteenth section of which provided that, "from and after 4 March, 1845, nothing shall be received in payment of taxes or revenue due the state but par funds."

In the progress of the suit, Frederick W. Trapnall had become regularly substituted in place of the Attorney General to conduct the suit.

In 1847, Trapnall ordered an execution upon the judgment which the state had obtained against Woodruff, who, on 24 February, 1847, tendered and offered to pay to Trapnall the sum of $3,755 in the notes issued by the Bank of the State of Arkansas, which Trapnall refused to receive.

On 25 February, 1847, Woodruff filed a petition in the supreme court of the state praying for an alternative writ of mandamus commanding Trapnall to "receive and accept, in payment of the judgment, the notes of the bank, or to show cause why he shall refuse to do so." The writ was issued accordingly.

To this writ the following answer was filed:

"The answer of Frederick W. Trapnall, attorney for the state pro tem., to an alternative mandamus hereto annexed, issued by the supreme court on the petition of William E. Woodruff."

"This respondent admits the judgment and tender as set out in the said petition, but alleges that he was not authorized to

receive the said Arkansas state Bank notes, because the twenty-eighth section of the bank charter, under which alone the said Woodruff could claim a right so to satisfy the said judgment, was repealed by an Act of the Legislature of the State of Arkansas approved January 10, 1845, and entitled, 'An act making appropriations for the years 1845, 1846, and part of the year 1844, and for balances due from the state, and for other purposes,' and by the nineteenth section of the said act."

"And this respondent submits to the court, if the repeal of the said section does not deprive him of all authority to receive the said bank notes from the said Woodruff in satisfaction of the said judgment in favor of the State of Arkansas against him and others. Respectfully,"

"FREDERICK W. TRAPNALL"

To this answer Woodruff demurred, and there was a joinder in demurrer.

Before the argument, the following agreement was filed by the counsel of the respective parties.

"Be it remembered that the following matters are agreed upon by the counsel for the petitioner and respondent in this cause, to the end that the same may be filed and become a part of the record herein."

"1st. The record and proceedings in the case of William E. Woodruff, and the said persons named in said petition as his securities, against the State of Arkansas, upon the first and second writs of error remaining in this Court, and which are referred to in said petition, shall form a part thereof by such reference as fully as though the same were incorporated therein at full length."

"2d. That said respondent, as attorney of record for said state in the suit aforesaid, is the proper officer by law to receive and acknowledge satisfaction of said judgment."

"3d. That the notes of the Bank of the State of Arkansas, referred to in said petition and response and tendered in this case, were issued by said bank, pursuant to the charter thereof, prior to the year 1840."

"4th. That after the creation of said bank, down to the year 1845, the notes of said bank were received and paid out by said state in discharge of all public dues to and from said state."

"5th. That said bank continues to exist, with all its corporate functions, and that in the consideration of this case, all the acts of the general assembly of said state affecting said bank shall be deemed to be public laws, as they have been heretofore decided by this Court to be, and whereof this Court will judicially

take notice; but to the end thereof, and for greater certainty, the Act of said general assembly entitled 'An act to incorporate the Bank of the State of Arkansas,' approved November 2, 1836, is here inserted at full length, and made part of the record in this cause, and which act of incorporation is in the words following."

Then followed the charter of the bank in extenso.

One of the grounds of the demurrer was the following:

"1st. That the nineteenth section of said act, entitled 'An act making appropriations for the years 1845, 1846, and part of the year 1844, and for balances due from the state, and for other purposes,' approved January 10, 1845, is a law impairing the obligation of contracts, and is repugnant to the Constitution of this state and of the United States, and therefore void."

On 28 July, 1847, the Supreme Court of Arkansas overruled the demurrer, and on 30 July, Woodruff sued out a writ of error to bring the case up to this Court.

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